Simply Sony: Sony Ericsson Officially Becomes Sony

Sony Corp. has announced that the transaction to Ericsson's 50% stake in Sony Ericsson has been completed as of February 15, 2012. As a result, of the transaction, Sony Ericsson becomes a wholly-owned subsidiary of Sony and will renamed to Sony Mobile Communications.

Sony will further integrate the mobile phone business as a vital element of its electronics business, with the aim of accelerating convergence between Sony’s lineup of network enabled consumer electronics products, including smart phones, tablets, TVs and PCs. Bert Nordberg will remain president and chief executive of SMC.

During the past ten years the mobile market has shifted focus from simple mobile phones to rich smartphones that include access to Internet services and content. This means that the synergies for Ericsson in having both a world leading technology and telecoms services portfolio and a handset operation are decreasing. Today Ericsson’s focus is on the global wireless market as a whole; how wireless connectivity can benefit people, business and society beyond just phones.

The transaction gives Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer electronics devices – including tablets, televisions and personal computers - for the benefit of consumers and the growth of its business. The transaction also provides Sony with a broad intellectual property (IP) cross-licensing agreement covering all products and services of Sony as well as ownership of five essential patent families relating to wireless handset technology.

Sony Ericsson has been losing market share for some time now and it will continue to as the popularity of higher-end feature phones is declining while the popularity of Xperia smartphones remains low. Sony also has dropping market shares in its media player, consumer camera and some other businesses, where application-specific smartphones could help to fight back the revenue from smartphones like Apple iPhone. In general, under Sony's roof the former SE will have better ability to compete than as a joint-venture.